Posts Tagged ‘productivity’

How would you know your Corporate Finance Adviser is making progress or success with selling your business or raising money if you have no metrics in place? The answer of course is you won’t, it is all conjecture (cobbling together loose assumptions of interest) until you pass the winning post. Here is the counter-intuitive point, the onus is on the entrepreneur or founder to agree them BEFORE approving the Adviser’s proposal or making the initial payment.

What should they contain? Let’s keep it simple, focus on hard evidence and observed behaviour. Here is a quick primer.

Attracting buyers or capital sources. Are our target lists increasingly stocked with “ideal buyers or capital partners” or a largely undifferentiated group of candidates? That assumes you have first developed a clear and specific picture of what ideal looks like, sounds like, and acts like (traits). Are we definitively providing valuable insights, ideas, and information to them in a timely manner? Are we highly organised such that our week is increasingly filled with in-person meetings with our ideal buyers and capital partners in various environments? (one-to-one, networking events, public speaking, hosted events)

Converting interest to firm commitment. Targets must become bidders or investors bringing firm offers. Are you increasingly seeing responses that validate the tremendous return on investment, the pragmatic value you are offering, and a peer-level trusting relationship, resulting in agreements to present a proposal? Is there demonstrable momentum in the quality and quantity of those proposals leading to firm offers, in a timely manner?

Firm commitments to an agreed preferred option. Are you able to preserve the critical and highly important points (valuation, mix and timing of proceeds, future roles etc) while compromising on moderate or low important issues with your buyer or capital partner? Are you able to resolve conflicts over outcomes or alternatives quickly and with minimal impact on your relationships? Do your advisers have preventative and contingent actions in place for an agreed offer (failure to raise financing in a timely manner, backup plan if deal collapses at a late stage and so on)?

Implementation of the deal. Are your adviser’s meeting or exceeding your expectations with clear metrics for the strategic fit, ease of implementation, benefits and cost impact on your business? Are they meeting or exceeding your personal priorities (financial, non-financial, peace of mind, time use and so on)?

Growth. During the engagement are your adviser’s creating new value for you in return for additional remuneration? For example, this might be new businesses opportunities outside of the immediate deal, where you are selling and exiting your business entirely, repeat opportunities for fresh investment at the next stage of the firm’s growth or referrals to people of mutual interest (private bankers, investors, entrepreneurs, social or philanthropic connections).

Focus your assessment on these five areas and the ease with which you progress. Keep it simple.

An Asian investor says to me last week, in response to a rare suggestion that he might want to meet a particular individual, “I have so many people asking to meet me when they are in town, I have to decline most offers. Can you send me a few details.” This just after he has taken 15 minutes to frame, who ideally he would like to meet. We have reached a point where we don’t trust our own judgement and those we invest time soliciting advice from. We are constantly second-guessing ourselves in the belief that a better alternative or use of our time will arise. By all means, be judicious with unsolicited requests to meet but stop procrastinating, start having more faith in your own judgement and those around you. You’ll surprise yourself how much faster you will move towards your goals.

I am at a zoo in the English countryside with my daughter, watching rare breeds of monkeys play and eat. Once they have chewed on the best bits of lettuce they flick them off their perch onto the floor so they can make room for new supplies. They don’t hoard or persist in trying to nibble away at food that has passed its’ “sell by” date or they are bored with.

Yet in many expansive mid-market and larger businesses I see huge amounts of time invested and energy deployed in processes and activities that have long ceased to be effective. Managers lack sufficient focus, organisation, and the volition to make “tough calls” on what to abandon.

The consequence is that they are becoming less productive, they are self-limiting their value to their clients and the organisation’s growth potential.

Assuming there is no “spare capacity” in your business, in order to ascend to the next level of growth:

What exactly are you going to stop doing or do less of this month and the month thereafter?

When are going to schedule the time and where are you going to implement that?

How will you measure progress and success?

Who must be held personally accountable to ensure your goal is met?

In my own business, I have consciously made a decision to abandon working for owners of startups and early stage businesses unless they past a stringent “smell test”. I will only offer strategic advice on dramatic growth opportunitiest to investors with substantial means and managers of businesses with upwards of £50M enterprise value from 1st September. I plan to keep a bi-weekly calendar. Account for the time saved (emails not read, calls not scheduled, meetings not set, and follow up not required) in rejecting the offers and the increased productivity earned.

I currently receive 3+ requests a week from entrepreneurs and small business owners, particularly seeking help attracting growth capital. They have an unquenchable appetite for advice but by and large, a poverty mentality in paying for it and investing in their own performance. Sorry I need to better invest my time if I am to be more valuable to clients, who want to go where I want to go.

If monkeys can make that simple determination without fear, why cannot intelligent managers and ambitious organisations?